Forget Emily. These days, a whole flood of Americans is in Paris.
People spent 2020 and 2021 either cooped up at home or traveling frugally and mostly within the continental US But after the lifting of Covid travel restrictions for international travel last summer, Americans is heading to another country again.
While domestic leisure travel shows signs of calming down — people are still on vacation in large numbers, but prices for hotels and flights are moderating as demand proves strong but insatiable — foreign trips are flipping back with a vengeance. Americans are boarding planes and cruise ships to flock to Europe in particular, based on early data.
According to estimates from AAA, international travel bookings for 2023 are up 40 percent from 2022 through May. That’s still down about 2 percent from 2019, but it’s a hefty climb at a time when some travelers are being held back for long. passport processing delay amid high record applications. Tour and cruise bookings are expected to surpass the prepandemic high, especially with strong demand for vacations in major European cities.
Paris, for example, experienced a big jump in North American tourists last year compared to 2021, according to the city’s tourism bureau. Planned air arrivals for July and August of this year climbed another 14.4 percent — to nearly 5 percent above 2019 levels.
“This guy is completely crazy,” said Steeve Calvo, a Parisian tour guide and sommelier whose company – The Americans in Paris — conducts visits to the Normandy and French wine regions. He attributes some of the jump to the rebound from the pandemic and some to television shows and social media.
“‘Emily in Paris’: I’ve never seen so many people in Paris with a red beret,” he said, citing that the signature The chapeau of the popular heroine of the Netflix show started popping up among tourists last year. Other newcomers are eager to take coveted photos for their Instagram pages.
“In Versailles, the Hall of Mirrors, I call it the Hall of Selfie,” Mr. Calvo said, referring to a famous room in the palace.
Strong travel booking numbers and anecdotes from tour guides are consistent with what companies say they’re experiencing: From airlines to American Express, corporate executives report a long-term demand for flights and vacations.
“The constructive industry backdrop is unlike anything any of us have seen,” said Ed Bastian, chief executive officer at Delta Air Lines, on June 27 investor day. “Travel is going to be gangbuster, but it’s going to continue to be gangbuster because we still have massive demand waiting.”
Transportation Security Administration data show that the daily average number of passengers passing through US airport checkpoints in June 2023 was 2.6 million, 0.5 percent above the June 2019 level, based on analysis by Omair Sharif on Inflation Insights.
And at many foreign airports, the explosion of American vacationers is noticeable: Customs lines are packed with US tourists, from Paris’ Charles de Gaulle to London’s Heathrow. The latter saw 8 percent more traffic from North America in June 2023 than in June 2019, based on airport data.
In a strange way, the rebound in overseas travel may be taking some pressure off US inflation.
International flight prices, while surging for some routes, is not a large part of the US Consumer Price Index, which is dominated by domestic flight prices. In fact, the inflation measure fares fell sharply in June from the previous month and down nearly 19 percent since a year ago.
That’s partly because fuel is cheaper and partly because airlines are getting more planes in the sky. Many pilots and air traffic controllers have been laid off or retired, so companies have struggled to keep up when demand begins to recover after the initial downturn of the pandemic, pushing prices higher in 2022.
“We just didn’t have enough seats to go last year,” Mr. Sharif said, explaining that while staffing issues persist, so far this year the supply situation is better. “The planes are still fully packed, but there are more planes.”
And as people flock abroad, it saps some demand from hotels and tourist attractions in the United States. International tourists not back yet in the United States in full force, so they do not significantly reduce the tide of Americans going abroad.
Home travel is almost always free in the fall — most likely July 4th weekend travel set the new one records, per AAA — but tourists aren’t so fed up that hotels can keep raising room rates indefinitely. Prices for staying away from home in the US climbed 4.5 percent in the year to June, which was slower than the 25 percent annual increase in hotel rooms posted last spring. There is even elbow room at Disney World.
Even if it’s not inflationary, the jump in foreign travel shows something about the US economy: It’s hard to keep US consumers down, especially the wealthy.
The Fed has been raising interest rates to cool growth since early 2022. Officials have made it more expensive to borrow money in hopes of creating a ripple effect that will reduce demand and force companies to stop excessive price increases.
Consumption slowed amid that onslaught, but it did not abate. Fed officials noted at their last meeting that consumption was “stronger than expected,” the minutes showed.
Stability comes as many households remain in solid financial shape. People traveling abroad are becoming wealthier, and many are benefiting from rising stock markets and still-high home prices that are beginning to prove surprisingly immune to interest rate moves.
Those without large stock or real estate holdings are experiencing a strong job market, and some are still holding on to extra savings accumulated during the pandemic. And it’s not just vacation destinations that are feeling the momentum: Consumers are still spending on a range of other services.
“There is a final blowoff in spending,” said Kathy Bostjancic, chief economist for insurance company Nationwide Mutual.
It may be that consumer resilience will help the US economy avoid a recession as the Fed battles inflation. As was the case with American hotels, demand stabilizing without declining may allow for a slow and steady moderation of price increases.
But if consumers remain so hungry that companies find they can still charge more, it could prolong inflation. That’s why the Fed keeps a close eye on spending.
Ms. thinks Bostjancic that buyers will withdraw starting this fall. They are reducing their savings, the labor market is cooling, and it may just take time for the Fed’s rate hikes to take full effect.
But when it comes to many types of travel, there is no end.
“Despite the economic woes, we’re seeing very strong demand for summer leisure travel,” said Mike Daher, who leads the US Transportation, Hospitality and Services practice at consulting firm Deloitte. .
Mr. relates that Daher in three driving forces. People missed the trips. Social media is engaging many in new areas. And the advent of remote work allows professionals – “what we call laptop luggers,” according to Mr. Daher – to extend vacations by working a few days from the beach or the mountains.
Mr. Calvo, the tour guide, is riding the wave, taking Americans on tours that showcase Paris’s shared history with France and driving them on minivan tours to Champagne.
“I have no idea how long it will last,” he said.
